The agency said it was assigning negative outlooks to the long-term ratings on these seven banks. It was also revising its outlooks from stable to negative on eight other Italian banks, including Unicredit.

This week, S&P downgraded Italian sovereign bonds to A from A-plus — reinforcing fears that Italy, with the second-highest debt burden in the eurozone after Greece, is getting drawn into Europe's debt crisis.

The agency cited weaker growth prospects and a fragile governing coalition as key reasons for its surprisingly swift downgrade, just four months after issuing a warning.

In a statement released Wednesday about the banks' downgrade, S&P said it was acting "in accordance with our criteria applicable to the relationship between the ratings on financial institutions and their related sovereign in the European Economic & Monetary Union."

It said it was "lowering our long-term ratings on seven Italian banks and assigning negative outlooks to the long-term ratings on these banks."